Physical backed tokens and what they mean for commerce

Transcript

GM GM welcome to web3 Academy a place where businesses entrepreneurs and creators can learn how to use web3 to build thriving business models and sustainable communities I'm Jaybird and as always I'm coming at you to make sure that you're on the Forefront of blockchain technology today we're deep diving we are deep diving and we're deep diving into pbts what's a PBT you ask have you heard of pvds well if you haven't you're going to want to listen to this show today pbts is a new standard developed by the team at azuki that stands for physical

backed tokens we've talked a lot about the potential of blockchain to be connected with physical items Collectibles luxury goods okay but how are we going to do that well we've seen it a little bit with projects like Nike and artifact connecting physical items through forging and you can use an nft to claim a physical item but the problem with that is the nft and the physical item become disconnected there is no connection between the two so the izuki team has gone out and they've solved that with this new standard called pbts physical back tokens and I'm here to tell you everything you need to know about them what they are how they work and the use cases that they really

enable and how that's going to change the future of Commerce this is this is one of I'm so so stoked on this episode so stoked to teach you guys this because I really believe that this is the type of real utility that blockchain offers that we will all understand and that will all be like oh so many aha moments so many moments where we've believed so much in the future of what we're building that it actually can change the world and make a big difference in terms of making businesses better making customers lives better making you know everything more efficient reducing a lot of the waste that we see uh it's just it's a total unlock a total Game Changer as you can

tell I'm fired up I hope you're fired up thanks for being here thanks for listening in uh if you enjoy this show and you want to support us in a zero cost way would really appreciate if you just take a minute and hit us up with a rating or a review on whatever podcast platform you're listening to this on or if you're on YouTube hit a little subscribe button and make sure you get updated on all of our content so so grateful for you for listening in and before we jump into Today's Show let's just hear a word from our sponsor the future of social media is here and that future lives in web 3 on top of lens protocol web 2 social platforms are broken and right for disruption you see the epicenter of social media is the

creators and yet they are the most neglected web 2 platforms like Facebook Tick Tock and Instagram are all essentially robbing creators of their worth creators are a new type of entrepreneur forming new types of businesses yet with web 2 platforms creators don't own their content to the profiles and that's their product and business instead they are tied to the platforms they choose to create on well just like how crypto is freeing us from Banks web3 is freeing us from these centralized platforms on lens protocol creators own their content own their profile and even their social graphing followers in the form of nfts this allows you to move freely from one social application to another with your content profile and followers moving along with you lens protocol enables

self-saverty for your social graph and interoperability across the internet at web3 Academy we believe this is the future of Social and that's why we've partnered with lens to ensure that the path of social media is heading in the right direction visit lens.xyz to learn more today unlock protocol is the nft membership protocol for web 3. content subscriptions Community Access event tickets are all forms of memberships one of the most common business models for creators and entrepreneurs today building an nft membership opens many new possibilities for your members everything from tailored multi-platform experiences to the ability to sell an unfinished subscription on secondary

markets these are things just not possible in web 2. however in order for this business model to work creators need nfts which are time bound or have built-in recurring payments unlock protocol does this for your nfts better yet with a few simple steps you can create your own nft contract without code what WordPress has done for websites unlock protocol is doing for membership nfts if you're an nft Creator you can't rely on royalties as they are likely going to zero you need recurring Revenue you need unlocked at web3 Academy We Believe nft memberships are

the future of business and community and that's why we decided to build an unlock learn more at unlock Dash protocol.com all right we're back and as I mentioned today we are deep diving on the four ways physical back tokens will change the future of Commerce physical back tokens are the next evolution of digital nft technology it enables ownership authentication faster legal Administration and brings the digital and physical worlds together they're just these are just some of the global industries that pbts will affect Collectibles such as figurines and

sports cards which had an estimated Global value of 402 billion in 2021 and are expected to reach 1 trillion by 2023. luxury goods such as Louis Vuitton Chanel which are valued at 269 billion in 2021 and are expected to reach 355 billion by 2027 and physical assets such as watches and jewelry the jewelry market alone is worth 37 billion right now so we're talking about some massive industries that are going to be affected by pbts uh and so in this deep dive I'll be covering the ins and outs of pbts

scan to own technology and what that is and what that enables and how this will revolutionize Commerce all right so first up the question on your mind I'm sure is what are physical back tokens to understand pbts let's first talk about fidgetal can be any nft that's tied to a physical object for example a recent podcast guest of ours Carly Riley who's the host of overrise jpegs shared that she plans to airdrop her top supporters in nft which can be redeemed for a bottle of gin once the token is redeemed that's that so once somebody takes the nft and

they redeem they they redeem it in some way some mechanism the physical bottle of gin and the nft are no longer linked so I would get let's say I had that nft I'd get it in my wallet and then I redeem the physical borrow Legend I get that but now they're not linked so sure I as the holder of that nft I could show that I redeemed the nft I could show probably on chain that I did that and making it likely that that bottle of gin that I got is the actual bottle of gin that came from Carly Riley for me supporting her in her first year of her podcast but there's no

guarantee the physical item does not have any connection to the end to the nft so in most situations that's fine like even in this case um it might be fine but let's say that Carly's gin becomes a collectible with long-term value the problem here is that there's no guaranteed way for the collector to prove its authenticity to the next buyer that's one of the big unlocks of pbts and something Zuki is pioneering through their gold skateboard collection so pbts unlock scan to own functionality meaning that if the physical object is sold so if in in the example above if the gin was sold if

I collected the gin and then I sold to somebody else or let's say I gifted to a new owner the new owner can scan the same physical object to prove ownership once scan the owner will receive an nft in their wallet corresponding to the physical item without this link it becomes difficult to Value the physical objects since it involves human intuition and biases that are challenging to overcome instead PBT technology ensures there's no broken link between the nft and the physical physical object ensuring its authenticity and history and thus its value so you're probably thinking how do pbts work okay well pvts are the evolution of Kong's Hollow chips and

izuki's Discord moderators don't share exactly what this means however one moderator shared that the details of the partnership are private on both ends I think the most accurate thing to say is that we are building in deep partnership with their technology but this protocol doesn't imply a new chip from Kong so here's what we do know Hollow chips take an NFC which is stands for near field communication Tech near field communication so an NFC technology to the next level because unlike standard NFC chips Hallows can generate their own digital signatures which is the reason pbts can exist hallow stands for Hardware locked smart contracts and they incorporate the scanning power of an NFC

chip with the functionality of blockchain Boom if your mind didn't just explode like mine did when I first figured this out wow what an unlock when a hollow chip is embedded in a physical item it links the item to the blockchain forever barring the removal of the chip or the non-existence of the blockchain uh from what we can tell azuki's Bean chip which is the chip that they created to prove this PBT standard and being stands for blockchain enabled authentication Network functions in an extremely similar way so chiru Labs which is the company behind azuki they are the driving force

behind making pbts an official ERC standard so in a nutshell cheerlabs describes e or C 57 5791 which is the PBT standard that they are currently pushing as a remixed ERC 721 nft that standardizes how physical nfts work and this is what we're all looking for this is huge a standard for physical items to put them on chain wow well while we're sure we'll learn more about the technical side over time the vital part right now of understanding this technology is what it enables for

physical items so for example decentralization decentralize item authentication meaning anyone can authenticate an item you don't require a specialized authenticator or a art collector who can authenticate the art it's just it's trustless it's there it's all on chain ownership history tracking so you can see who owned it five people before you a few of the item that's a collectible item that's been around for you know hundreds of years for centuries who's owned that where's that been will you be able to see that airdrops for owning a specific item or a collection of them and token gaining experiences for physical items not just for digital

items and and so much more so if you have you know a a specific sports card well I could token get you access to let's say you had a Barry Bonds uh who's a famous NF or sorry MLB player one of the top baseball players and he's currently on the ballot to be entered in the Hall of the Baseball Hall of Fame let's say you had that sports card well I could say you know what because you have that sports card you can have access to his Hall of Fame induction ceremony and like it's just it's so exciting to think about the potential here um wow okay what's next on the horizon so during our research we came across an interesting proposal from Cameron

Robertson uh and fellow and other web3 developers The Proposal described a vision for the ethereum reality service which they're calling ERS which the development team believes could be the framework that we use globally for high value movable assets Cameron and the team believe that ERS can function in a similar way to the ens ethereum name service meaning we we'd have one registry for all pbts the ERS protocol would be an open source public good allowing anyone to link an nft to any physical object with a compatible chip why the ERS well it would allow users to Mint pbts alongside other digital assets such as ERC 721 and erc20 tokens for

streamlined collection launches wow like it's just I just boom boom boom I'm so excited about this okay let's talk now it's that viewer how pbts will change the way we interact with physical items pbts simplify a host of functions that are otherwise extremely difficult to do without a digital linked token however we believe that these four functions will benefit the most first simple authenticity and ownership history verification two Flex utility three simpler legal Administration for high-end goods and for unlock deeper community experiences let's dive into each one of those first simple authenticity and ownership history

verification so counterfeit products are an enormous issue worldwide with experts estimating that 80 percent of the world that has handled counterfeit products both knowingly and unknowingly some estimates value the account different Market at 2 trillion annually that's 3.3 percent of global trade in fact the fake Goods Market is actually growing faster than the luxury Gardens Market itself increasing by ten thousand percent over the last two decades now on the surface counterfeit Goods only affect the profit margins of luxury Brands but it goes much deeper with many companies counterfeiting electronics and securing

care products which could lead to serious injuries or you know you you're receiving a product that doesn't actually do what it's supposed to do it doesn't you know it breaks down it doesn't live up to the standards that you thought you were purchasing when you bought that certain watch or that certain phone or that certain computer and it breaks down because it's not actually what you thought you were getting so fake fake Goods accounted for products it's just it's an issue that I think we all understand is far and wide and it also obviously heavily affects secondary sales markets in Thailand they have so many high-end fakes that most are indistinguishable from real products

if someone were to sell these counterfeits is the real thing and many people do the buyer would have no idea unless they're professionally appraised even then it relies on the knowledge and experience of the appraiser which they you know they might get it wrong right the problem is even bigger when it comes to high-end art many valuable paintings and artworks aren't verified by the artists themselves because often the most high-end paintings the artist is dead they've passed away so instead we rely on a verification by Galleries and expert appraisers this process is extremely difficult for appraisers as they have to consider ownership information the location where the art is held how the artwork was acquired the exhibition history marks and

inscriptions and invoices like you're talking about you're basically in account content trying to audit all this information and then based upon that make a decision as to whether or not this art is real which has huge consequences because some of this art is worth millions of dollars and there's obviously many other factors that lead to a lengthy and expensive process that still doesn't guarantee authenticity so it's also just as difficult to verify ownership of an item which can make a substantial difference to the value of an item for example any shoes or clothing that athletes wear on the field or more valuable than memorabilia replicas obviously so how much would a

pair of football boots be worth if if Messi wore them versus if you know they were just another pair off the rack they could be the exact they could be Messi's exact shoes that somebody forged a signature on and you think that they were worn by Messi but if he actually If Messi actually wore them they have much more now let's say what happens if it was a t-shirt from a championship winning game you know that Messi wore after a game he's wearing you know these such items represent more than just physical objects they represent specific moments in time that have value to many collectors and the only way you can verify authenticity and ownership with 99 accuracies if the athlete him if themselves handed the

item to you with signed documents and attestations but there's always the what if Factor instead pbts reduce the need for human appraisal and guaranteed the authenticity and ownership history of the item in seconds taking the guesswork out of appraisal just a huge unlock for any collectible item Flex utility human beings are all about flexing it's a way to establish Authority and build connections but most ways of doing are they're seen as cringe for example if someone was driving their Lambo you wouldn't think they were showing off instead you'd probably admire the vehicle maybe you wish you had one I know I would and if you don't

like Lambos replace it you know replace it with Whatever item comes into your head that you like but now let's say that that same person was always uploading onto Instagram pictures posing with their Lambo the first reaction most people would have is wow look at that poser because it's obvious they're trying to show off their car on top of this it's easy to assert that the lambo picture is rented you know maybe the Lambos are rented Lambo because there's no good way to prove ownership the owner could stand there with a receipt but that's just even worse or maybe it's their friend's Lambo you know you no way to prove uh you know it's kind of like okay weird flex but okay it's also not just about wealth anymore we're seeing a shift towards scarcity

and being an Insider becomes more valuable than money and assets that's why PBT is allowing people to Showcase all kinds of proof nfts is a huge unlock well-known web3 native g-money started his clothing label 9 DCC for that exact reason nine dcc's first release is a simple NFC chipped black T-shirt but it's Flex utility is Extreme there are only 111 nfts released in the first drop meaning owners can Flex their Insider status for having one of those nfts or one of those t-shirts which is a limited number of on top of this owners could use these

t-shirts to issue their own proof of attendance and proof of interaction nfts so not only can owners Flex their expensive t-shirts but they can also Flex their Network and allow others to flex their Pro apps talk about Flex section another way pbts enable Flex utility is in metaverse fashion a Pioneer in this space meta Factory is working on interoperable digital wearables that can only be used across different platforms but also redeemed for real life products fashion is an expression it's a way for people to show who they really are so there's no doubt in my mind that clothing pvts will be a huge industry in

the near future soon your digital identity will showcase everything you want others to know about you you'll be able to have a digital item that's the exact same as a physical item so if you love a certain digital or sorry physical t-shirt or a certain physical pair of shoes well you can have the exact same digital item and prove that you own one or the other well only buying one it's just I mean it's so amazing to think about this stuff I am fired up about this simpler legal okay number three way that this is very exciting simpler legal Administration for high-end Goods so legal Administration for high value assets can be difficult and expensive that's why matterium aims

to simplify this process through pbts and what they call the material ass asset passport or map for short so it functions slightly differently to pbts and we've discussed as it bakes in all the legal requirements into the PBT itself for example each map nft comes with legal Frameworks for dealing with item disputes as well as all the verification documents to prove authenticity essentially matterroom includes digital copies of all important physical documents such as invoices contracts and all other appraisal proofs we mentioned above each matter EMS nft

also comes with certification and warranties from third parties to support an item's authenticity some of the items matarim is turning into pvts include gold bars so the bars themselves are kept in an internationally renowned Vault while the nft which holds a legally enforceable title can easily be traded so now you can trade physical gold bars on online you don't have to you don't have to go to you know go to your Vault or go to your bank that secures your gold bar you can just boom you want to trade that go bar you can do it seamlessly and you can do it to anybody in the world well that gold bar still stays put and still stays safe find

wines and whiskey so like gold wines and whiskeys remain in professional Sellers and vaults unless the nft holder wants to store them store the item themselves or if they want to take it themselves but again easy to trade historic instruments battery em has tokenized instruments worth millions of dollars but the interesting part is the functionality that can be added to the physical object for example the nft could State who is and isn't allowed to play the instrument so let's say you own one of Beethoven's pianos well you could say you know I I want to I don't allow anyone to play it or through the nft you

could Grant access to somebody and you don't need to be there with them to Grant access you could just do this all on chain you could on chain transfer them access through a token which then they take in their wallet and they show up and prove that they have this token which then gives them access to that physical object I mean it's just incredible not to mention that also in the middle of tokenizing real estate it's not clear what their vision of that is and what their version of how they might use pbts will function in that regard but I think you know just so many exciting things happening in the connection of physical and digital items and one of the things that's so exciting about this is the way that it unlocks deeper community experiences nfts and

public blockchains allow Brands to create digital and physical experiences for holders of particular tokens for example forgotten runes a popular nft game and nft collection recently created a digital Halloween experience for its nft holders and nft holders from 10 other Blue Chip communities they didn't have to ask for permission from other communities all they had to do was create the relevant smart contract and announce the experience well the example focuses on Purely digital nfts the same can be done with pbts for example G money could reward his top supporters based on how big their own network is remember nine DCC t-shirts

allow holders to give out their own poapps alternatively g-money could also create an experience for 90cc holders who've attended certain events or hold X number of items when it comes to pvts the way people can create community experiences is pretty much limited by only their imagination talking about token gated communities exclusive Discord channels real life quests IRL events early product access collaborations giveaways so much more these are just some of the functions that pbts enable all in a trustless permissionless manner you can imagine as well one of the things I think connects us so much as humans is physical objects you

know it's closed fashion in such a big way if you see somebody who's wearing something similar to you if you're both if you're both wearing the same hat you both have the same Nike sneakers instantly there's a connection you both like the same thing wow okay well now let's imagine that because everybody who owns this pair of Oakley sunglasses you could say hey if you own one of these pairs of sunglasses you now have access to this community where it's all other people who own that same thing who therefore we know you have a bond with it's just so exciting when we think about the potential around community building and it extends to pretty much any physical object that we could turn

into a PBT let the lines be blurred pbts have the power to change how we interact with physical items as well as the digital experiences we can create and participate in they remove the need for expensive and lengthy appraisals enabling instant guarantees of authenticity they remove the need for lawyers paperwork and bureaucratic red tape and they can verify the true value of an item without debate but they're also the key to bringing the digital and physical world closer together right now people spend an average of 400 minutes on the internet each day but I guess that most of that time is spent mindlessly scrolling through social

media when your community members could be interacting with your brand above all pbts removes red tape that comes with transacting physical Goods while enabling enabling deeper Community connections sounds like a win in my books thanks so much for listening folks I hope you're as fired up about pbt's as I am if you have any thoughts would love to hear any comments any questions you have please either comment on our website on this article itself or join our Discord server where Link in the show notes if you're not already in our Discord where we have a chat on every podcast where we

break it down and discuss it together as a community we'd love to see you there thanks again for listening have yourself an amazing day and a great week keep on smiling keep on spreading the joy lots of love thank you for listening to web3 Academy we hope this helps you along your web 3 journey and if it does please share this episode And subscribe so you don't miss the next one nothing in this podcast was Financial advice crypto and web 3 can be risky you can literally lose it all in fact if you invest on account of what we say you probably will lose it all so don't do that in all honesty the point of this podcast is to remove the noise of markets and price and focus on utility and implementation

anyway so you should not take any of this as Financial advice thank you friends and see you in the next one